THIS IS FOR INTERNATIONAL FINANCE, PLEASE ANSWER THE QUESTIONS AND THE CALCULATIONS WITH FULL EXPLANATIONS! THANK YOU SO MUCH!

Question 1: Coca Cola (KO) and Pepsi have continually been hedeing their forcign currency earnings. While they manufacture in Europe, significant sales are coming from noa-curo currency markets. How they hedge differ, however, dramatically. While Coca Cola (KO) hedgod to protect eamings, Fepsi have sometimes generated a significant proportion their camings from theit hedses, As the noemt graduate from CUD, the CFO of Coca Cota (KO) assigns you the important tak of analyzige the different types of risk faced by the multinational, particularly, for European deals. The following transections are of particular interest to the CFO: - The Coca Cols (KO) purent compury in the tis. has sold inventory in Spain for e27,500,000 payble in 120 days. Ciment spot nite \$08675/ 120-day forward nate $0.8325V Cosa Cola (KO)'s parent cost of capital is 12.0% US 120 day borrowing rate is 7.005pa. US 120 day investing rate is 5.0%pa. US 180 day borrowing rate is 6.0%pa. US 180 day investing rate is 55%pa Spain 120 day borrowing rate is 20.05pa. Spain 120 day imvesting rate is 8.04pp. Spain 180 day borrowing rate is 9.0% pa. Spuin 180 day investing rate is 8.5%p. Your team of legendary financial analysts expect future spot nate in 120 days to be 50.7900C (a) Provide 3 posesble scenarios where transaction exponare can exist? (b) Evaluate the pros and cons of hedging as a risk management tool. Oive an example of each, (c) Based on the ahove information, analyse the impuct of - Rentaining unhodged - Fonward bedging - Maney market hedging (d) Tyou want to hedge the risk by either using a forward or a money hedge, which hedging technique would you recommend to the CFO? Part of your analysis should include the break-even rate. Explain your